SMC to buy ATI grains terminal facilities

San Miguel Corp. (SMC) is already in the final stretch of negotiations for the purchase of the grains terminal facilities of Asian Terminals Inc. (ATI) in Mariveles, Bataan.

Sources said the purchase price could be around P2 billion. SMC’s upcoming deal with ATI is the latest in its string of acquisitions in recent years, which include Pure Foods Corp. bought from the Ayalas and Cosmos Bottling Corp. from the RFM Group.

According to SMC officials, ATI will not be its last acquisition. The company is currently looking at several prospects, many of which will be in the food business.

SMC chairman Eduardo Cojuangco Jr. revealed yesterday that the deal is almost done as far as the company’s purchase of ATI’s grains bulk handling facilities in Bataan. This is part of SMC’s move to further improve the efficiencies of its agribusiness operations.

He said that an agreement in principle has already been reached with ATI, whereby the latter will spin off the Mariveles facility from the rest of its business, which will not be affected by the sale of the bulk grain handling terminal. "There are just a few matters that need to be settled before we make the final announcement," he said.

SMC officials told The STAR that the bulk grain terminal will be used to handle mostly the company’s imports of raw materials which will include corn, cassava, and possibly sugar for its agriculture and liquor business.

ATI will be utilizing the proceeds of the sale of its Mariveles facility for the expansion and upgrading of its South Harbor, Manila port operations.

Under agreements entered into with the Philippine Ports Authority and the province of Bataan, ATI held the right to develop and operate a bulk grain terminal in Mariveles for 15 years until 2007, renewable for another 15 years.

By the mouth of Manila Bay, ATI has built the Mariveles Grain Terminal which is considered as the country’s most modern bulk grain handler and one of the best facilities of its kind in Asia. The terminal has an average depth of 14.5 meters alongside its 217-meter pier. It can handle deliveries from Panamax vessels at a rate of 8,000 to 10,000 metric tons per day. A second barge/ship loader has an outloading capacity of 300 metric tons per hour and accomodates smaller vessels of up to 6,000 DWT.

Its four Marweight-Siwertell unloaders discharge grains into conveyors and bucket elevators, which move the cargo to silos and warehouse facilities. Twenty vertical silos have a total capacity of 110,000 metric tons, while the warehouses can hold 70,000 tons. Inside the warehouses are bagging machines that can each handle 30 metric tons per hour.

ATI, a publicly listed company in the Philippines like SMC, also operates four of the country’s largest international ports – the Container Terminal and General Stevedoring Terminal at the South Harbor, Port of Manila; Port of Batangas which has terminals for both cargo passenger ferries; and Port of General Santos City in a joint venture with another port firm. The company has likewise diversified into third-party logistics, maximizing synergy with its main cargo handling business.

The STAR learned that the setting up of the Mariveles grain terminal was a condition required of ATI by government in exchange for being allowed to set up its terminal at the South Harbor. "Ever since, ATI knew that it was going to give up the Mariveles facility one of these days at the right price," official sources said.